Fed Outlook: An Economist’s Take

6/19/2013 4:13PM

If the FOMC could be summed up in one take, it would be that the Federal Reserve’s policy shifts will remain data-driven and nothing is predetermined, according to Mesirow Financial chief economist Diane Swonk.

This transcript has been automatically generated and may not be 100% accurate.

... the the ... Lance was ... chief economist with Mr. of financial each cut it ... Diane thanks adjoining us ... my ... so is done and he did the mock it's infected taking this pill immediately it sounds as if he's laid out something of a course for how the taping process my work ... McGuiness the tide of sadness and unemployment at which point they would ... want riches was would actually ... get down to zero in ... on that ... the house to get the gear shift is that an Indiana when you meet recent recession appoint a still be in place to process ... the market reacting ... um I think the market is overreacting I think you saw some of that element in the Chairman's reaction when your is asked that the markets every acting is the diesel puzzled by how much the market reacted to this ... that that is really made it very clear that the continuing to stimulate ... the economy and then as they can use the analogy about on easing up on the salary or not mean the break and think those are very important things for the markets are digested this point I'm ... also that you know he actually came out of the center are bigger things you need to hear and our size of this genus program an evenly tapering ... the ALM that that could easily get to one point two trillion ... aam been hit with QE one cents is not a small ... aam process at the cost is common to time ... keeping the auction large for an extended period time the telecom continue to hold mortgage back securities and that sell them or even let them roll off ... on a keeping a balance sheet large rated until they raise interest rates meeting after they raise interest rates ... this is a very glacial process of there's no exit here it still stimulating even when the duets that it will be glacial ... ice and counting ... you know you mention ... being ... kind and ... not play a problem that the Fed isn't a phase ... of having to buy a bigger share of the Treasury Theater nineteen the ECB cut the deficit itself ... is ... is coming down ... do you think that if it costs and disconnected since late May be a disconnect that the Fed isn't ... anticipating at ... I think it's something that unites us and that explicitly said that let's face it on the deficit is falling like a rock right now has the Congressional Budget Office Max and I don't think that's anything like this into a war to ... end its long as the sequester stays in place which is very much looks like it will make even see additional cuts ... would be a showdown over the debt ceiling seems likely in November so ... you're going to see on that plane a larger role here and I I do know that you know that some the one batters are uncomfortable with the purchase program ... taught me distort markets wealth ... away elitist art market says it takes a larger share of those markets as the market is itself not as big as it once I would be so that if it has to view all of these things in the context ... of the emerging economy and credit emerging economy now is that we're not can be a Chinese meat rest responses we once by ... the end of the Wellcome it seems to me his inflation we had the skiing on one of the ... committee made this into his polite dissenting in the other direction from the Honda Center at the George ... his concerns about fooling inflation ... on how much of the ... concern is that I mean that's Avici something that would push toward maintaining ... that on Texas' the sometime in my view can be more aggressive with it ... exactly and that's really where symbol is trying to say hearing you say when UTC and is set among the party members of that that it represents someone who can vote as well or another use another person's view insight into just one line though I'm you know that there are many people who are deciding to end you'd expect should not be increasing its asset purchases at this time some of what the stock already ... on the flip side to jobs there as well um I think you can see this tug a war over the summer ... as the Fed has to deal with is that really transitory the slowdown in inflation we've seen ... you for the chairman underscore the difficulty that Japan is facing ... you wanna avoid at all cost inflation ... is inflation and about one percent inflation finds transitory okay it is to write a piece on ... there than enough to stop it up again ... and an entertaining canister my an intention was how ... much Denver Nanking seems to be placing be ... better economic outlook and housing ... and when the rice maize with ... the fact that I'm ... income growth really haven't ... kept pace with the rise in home prices ... Jiping clean fun and may be too optimistic and housing outlook outlook to me what you guys expect ... it's a great point airplane actually I think this is one hears the Fed the Fed has been overly optimistic that was playing out in their forecasts in the November nineteen subset Laufer on what adjust ... policy ... I am a big concern as the housing numbers have come out quite as strong as we like in recent months ... the price that appears on the raised our preaching and this is no inventories and is no inventories because people are still not willing to listed ... prices ... even though they are higher than the weather not high enough to really push Dushek shadow inventory into the market ... we also see on big share of first-time buyers falling in the market why this market has been driven by investors that creepy have investors in there but we got five cash purchases buying of foreclosures to put your bread ... not the same multiplier Sunday AC with people sleeping on ... is not the same kind of strength in the housing market you'd like to see ... given how weak the market has been for so long ...